Disclosure and Investigated Complaints

It is commonly difficult for prospective clients to obtain good information about lawyers and paralegals. The significant growth of brand advertising is cogent evidence of this. Potential clients assume that brand is evidence of quality when that may well not be the case. Substantial sums are paid for brand advertising because it works. Similarly, the advertising of dubious awards and reassuring photographs evidences that lack of genuine information about quality.

Concerns about lack of information

A recent market study in England and Wales by the Competition and Markets Authority said that:

… consumers generally lack the experience and information they need to find their way around the legal services sector and to engage confidently with providers. Consumers find it hard to make informed choices because there is very little transparency about price, service and quality … lack of transparency weakens competition between providers and means that some consumers do not obtain legal advice when they would benefit from it.

A similar conclusion was reached based on Ontario research in the 2010 Report of the Ontario Civil Legal Needs Project:

A significant challenge is to find ways to encourage more people to receive the full benefit of the existing resources available to them. People often can’t find legal help because they don’t know where to look, or because they perceive they won’t be able to afford it.

In a recent column, I wrote about market failure as a consequence of lack of consumer information potentially leading to a race to the bottom as high quality lawyers and paralegals (the “peaches”!) are unable to distinguish themselves from “lemons”.

What might help potential clients?

What can usefully be done about the lack of available information as to quality? There are a number of possibilities. One is to encourage genuine referral services (as opposed to mere brokerage services) and genuine ranking services (whether based on peer, client or other assessments) that assist potential clients in finding appropriate assistance.

Another is to move toward enhanced credentialing or limited licensing as a signal of expertise. Unlike some other professionals, all lawyers have unlimited licenses to practice law yet few, if any, have the competence to practice in all areas of the law. Beyond word of mouth and self-serving advertising, how is a client to figure out who to retain? While licensing tells potential clients that minimum standards of competence have been met and provides some assurance of professional conduct, the mere fact of licensing does not allow potential clients to distinguish between individual licensees.

The Law Society is a source of some useful information beyond the mere fact of licensing. The certified specialist program provides an indication of expertise. Public Law Society Tribunal records provide some information with respect to past professional conduct.

A look at 2016 LSUC complaints information

With the issue of useful information in mind, I read with interest the recent LSUC reports 2016 End-of-Year Report for the Professional Regulation Division and the Analysis of Complaints in Professional Regulation in 2016.

The number of complaints[1] received in the Professional Regulation Division has remained stable in absolute number at slightly less than 5,000 per year despite increasing numbers of lawyers and paralegals. The number of complaints per lawyer and paralegal in private practice is very similar at just over 10% for each type of licensee. The trend is generally downward for both over the last six years.

In 2016, the Intake Department dealt with some 4,400 complaints. 2,152 complaints were sent for investigation. 2,243 complaints were closed in the Intake Department. Of the 2,243 closed complaints, 236 were marked as “resolved” suggesting that there was something to resolve but not something meriting formal investigation. The balance were closed for a number of reasons including the conclusion that no further regulatory action was required, the absence of jurisdiction and the formal (or practical) withdrawal of the complaint.

In 2016, 2,018 new complaints were instructed for investigation[2] and investigations staff closed 2,334 instructed complaints. Perhaps not surprisingly, client service issues are the most common followed by integrity, governance and financial issues. To state the obvious, potential clients are interested in knowing whether they will be well served by professionals with integrity who are prepared to be governed and deal properly with financial matters.

How investigated complaints are ultimately dealt with is interesting. Over the last three years, only between 10% and 15% of investigated complaints have been transferred for prosecution. During the same period, approximately 40% have been closed on the basis that there is no evidence or insufficient evidence warranting regulatory action.

There is a substantial number of investigated complaints where the result is some action short of prosecution. Some are closed with diversion such as a Regulatory Meeting, an Invitation to Attend, a Letter of Advice, a recommendation for a practice or spot audit or by an undertaking from the licensee[3]. In the last three years, some 2% to 4% of investigated complaints have been closed investigations with diversion. A more substantial proportion of investigated complaints (approximately 20% to 30% over the last three years) have been closed with a staff caution or with best practice advice. The bottom line is that approximately one-quarter to one-third of investigated complaints raise regulatory issues and result in a regulatory response short of prosecution.

There are different types of complaints information

To make the obvious point, the Law Society has information about lawyers and paralegals that is not publicly available and which might well provide useful information to prospective clients. But the obvious counterpoint is that some of the same information could be unfairly prejudicial to the licensee if publicly available.

There is a spectrum of regulatory engagement from (i) mere receipt of a complaint to (ii) instruction of a complaint for investigation to (iii) determination after investigation that regulatory action is merited short of prosecution to (iv) prosecution. There was a time when our regulatory process was so lawyer-centric that even prosecutions and findings of professional misconduct were not transparent. That time has passed and the question now arises, given the genuine difficulty faced by potential clients in obtaining information, whether the current balance is the appropriate balance.

Discussion in England and Wales

Greater disclosure by legal services regulators is currently being discussed in England and Wales. The 2016 Interim Legal Services Market Study Report of the Competition and Markets Authority asked[4] “Are there any measures of quality that can readily be collected by regulators or government … on observable trends in quality of legal services?”. The Solicitors Regulation Authority (the SRA) responded saying that there are “a number of other indicators regulators can use, which cumulatively can give an indication of quality” including claims against the compensation fund, insurance claims and complaints data. The SRA also said:

Our Codes contain the minimum requirements for those we regulate, all of which are mandatory. We also require diversity data to be published. We are currently considering what information about SRA regulated individuals or firms we should publish or require firms or individuals to publish, and are planning on releasing a discussion paper by the end of the year subject to decisions being taken by our Board. The areas we are looking at include regulatory action, complaints data, insurance claims data and accreditations.

The Law Society of England and Wales[5] responded to the subsequent SRA discussion paper by raising concerns about accuracy and relevance and suggesting that it was better for law firms to voluntarily provide information in the competitive market. Of course, this approach would mean that negative information about solicitors would not be made available.

Thinking about disclosure

It is to be expected that lawyers and paralegals would be uncomfortable with greater transparency of complaints or claims information. We imagine this from our own perspective and fear disclosure of unfair or misleading information (and even true but embarrassing information). For example, it would be natural for family law lawyers to be concerned about disclosure of complaints from the opposite party given the often dysfunctional nature of family law proceedings.

That said, it is clear that further and better information about lawyers and paralegals is needed. From the client perspective, enhanced transparency is desirable while, of course, protecting confidential and privileged information. While not the focus of this column, there is also value in enhanced transparency in support of regulatory accountability and public confidence in legal services regulation.

Perhaps the practical answer to concerns about disclosure of unfair or misleading information is careful focus on what should be disclosed. If there is only disclosure about investigated complaints which have led to a regulatory outcome then what would be disclosed would be the result of investigation and evaluation. Fear of disclosure of malicious or unfounded complaints would not be justified.

It might also be worth considering whether there should be disclosure of single or stale matters. It may be that little if any real information is provided if a single matter is disclosed or if a relatively ancient episode continues to be disclosed. Treating stale matters as such is somewhat analogous to the evolving “right to be forgotten” that is of increasing importance in which so much personal information is available and for so long on the internet. As well, it may be worth considering whether contextual information could also be provided, for example the average number of such complaints for licensees generally or, say, family law lawyers specifically.

Up to this point, the discipline process has not been discussed. The main point to be made here is that allowing transparency about some investigated complaints and a formal discipline record are different things. There is no need and no apparent reason for the information available to the public also to be information that is treated as relevant by the Law Society Tribunal in assessing appropriate discipline penalties. There is good reason to limit Tribunal panels to consider only findings of professional misconduct by prior panels. Where a more onerous penalty (such as suspension where a reprimand would otherwise have been ordered, a lengthier suspension or revocation) is imposed because of prior misconduct, there is significant difference between prior misconduct found by the Tribunal after an adjudicative process and prior misconduct found by the Law Society after an investigation. Concepts of progressive discipline and ungovernability based on prior misconduct reasonably depend on findings made in a comparable process.

But the “right to be forgotten” discussion raises a point that some have made about formal discipline histories. To use an extreme example, should there continue to be transparency about a reprimand given 25 years ago absent any subsequent proceedings? Discipline panels routinely conclude that a stale disciplinary history is irrelevant for current purposes. Perhaps it should also irrelevant for the public purposes.

If it is accepted that potential clients have insufficient information to properly assess the quality of lawyers and paralegals (leaving them instead reliant on brand advertising, irrelevant and misleading “awards” and photographs of reassuring faces), then it follows that we should be thinking carefully about whether further information can be disclosed. It also follows that it is proper to think about the utility and the fairness of further disclosure.

It should be recognized that lawyers and paralegals will almost inevitably resist disclosure of complaints information, even investigated complaints leading to regulatory action. But it should also be recognized that there is another perspective that must be considered which, as always, has no advocate.

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[1] Complaints can come from clients, other parties, other lawyers, judges and the Law Society itself. While professional regulatory process is largely reactive, the Law Society itself initiates the complaints where matters come to its attention that may deserve further consideration.

[2] The Law Society Act provides that the Law Society has certain investigative powers where the conclusion is reached that there is sufficient information indicative of professional misconduct or lack of capacity. In these circumstances, PRD says that a complaint has been instructed for investigation.

[3] Some of those transferred for prosecution are also closed with diversion.

[4] This interplay between the competition authority and the legal services regulatory provides an example of a productive interplay in which competition issues are raised while the regulator keeps independence.

[5] Unlike our law societies, the Law Society of England and Wales is the representative of and advocate for solicitors.